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FAST LANE - November
2002
Kentucky’s two-month tax amnesty program has added nearly $100 million to state coffers. And, the final figure could be even higher, say state officials, noting that it may take several months for last-minute amnesty applications to be processed. By making an application with the state during the program’s August 1 – September 30 window, businesses and individuals were forgiven any interest and fines that would have normally accumulated on unpaid taxes. Anyone who did not come forward during that time is now subject to the fines and interest, plus a 25 percent penalty. More than 16,800 individuals and businesses participated in this year’s program, with 87 percent of the money coming from businesses. Payments were received from taxpayers in 49 states, the District of Columbia, and six foreign countries. In fact, payments from taxpayers outside of the Commonwealth totaled 56 percent of the receipts received as of October 11. “Most of the out-of-state payments have come from multi-state corporations doing business in Kentucky,” said Revenue Cabinet Secretary Dana Mayton. The largest single payment was more than $6 million while the smallest was $0.01. The amount raised in this year’s program far surpasses the $20.4 million goal originally set by state officials and is nearly $40 million more than the amount raised in Kentucky’s first amnesty program, which took place in 1988. STATE
And, for the first time ever, Kentucky exceeded the national average for the percentage of young adults with high school diplomas. Though state officials acknowledged that part of the reason for the improvement was the state’s poor standing to start with, they also credited Kentucky’s push for education reforms and initiatives, economic factors and workforce development efforts. They are also hoping that the improved figures will carry over into higher college enrollments. Figures for the state fall enrollments at colleges and universities throughout the state indicate that that may indeed be occurring already, with many institutions reporting record numbers. State economic development officials say the improvements will be a tremendous help in attracting new industry, since businesses are most often interested in locating in areas where they can hire educated workers. STATE Kentucky’s Finance and Administration Cabinet has launched a new online system that enables private vendors to electronically submit sealed bids on work for the state government. “This new online bidding system saves both the Commonwealth and vendors time and money, which benefits us all,” said T. Kevin Flanery, secretary of the Finance and Administration Cabinet. “We recently completed a successful pilot project, and now we are ready to move forward with this new system.” Interested vendors must first register at http://ky-purchases. com. A listing of job opportunities is also available on the Web site. BOWLING GREEN A Japanese company that produces robots utilized in automobile manufacturing has announced plans to build a 20,000-square-foot facility in Bowling Green. The plant will be the second U.S. facility for Waltex Inc., which expects to break ground by the end of this year and be operational by next spring. Waltex has operated a similar facility in Walton, Kentucky since 1994. Company officials say they were drawn to the Bowling Green area by the available work force and the number of other automotive industries expanding the region. The company plans to initially hire 35 workers with an average wage of around $18 per hour. BOWLING GREEN Perot Systems Healthcare is one of the largest providers of full-service IT operations in the hospital industry, managing significant relationships with four of the top 20 U.S. health systems. The company expects to provide approximately 175 new jobs at the Kentucky facility within the first year, growing to 375 jobs within three years. An extensive training program is being implemented to provide the company’s Bowling Green-based personnel with subject matter expertise in revenue cycle management for healthcare providers. STATE
A connectkentucky survey shows that while 69 percent of Kentucky businesses use computer technology to handle some of their business functions, only 36 percent use the Internet and just over 20 percent have a Web site. Furthermore, more than half of Kentucky businesses responded that they see “no need to use the Internet.” “This finding is very disturbing because it indicates that Kentucky businesses are unaware of the potential productivity gains and revenue streams that can result from sound e-business strategies,” said Dr. Linda Johnson, president of the Center for Information Technology Enterprise, Inc., the company responsible for the connectkentucky project work. Overall Kentucky is on par with national averages in business use of technology, yet there are significant regional differences. “The urban triangle is significantly ahead of national averages, while our rural businesses are lagging far behind,” said Dr. Bill Brundage, connectkentucky co-chair and commissioner of the Governor’s Office for the New Economy. The survey also showed that, nationally, companies with Web sites use the Internet to expand their customer base, serve their customers better, increase productivity and save money.Shelbyville. STATE
Under the $7 million pact, Cuba will purchase processed foods, meats, tobacco, wood products and numerous other items from Kentucky producers. The agreement is the result of Kentucky’s participation in the U.S. Food and Agribusiness Exhibition, which showcased products from 33 states. The exhibit was the first of its kind to be authorized by the U.S. government. Six Kentucky companies were featured at the show and another seven companies from the Bluegrass State were represented by the Kentucky Export Trading Corporation, a non-profit organization that promotes international trade of Kentucky agricultural products and services. Cuba spends more than $1 billion on food imports a year, a figure that is expected to increase to $1.5 billion by 2005. Currently, only $133 million of that total comes from the U.S. However, with the recent easing of trade restrictions, Cuban imports from the U.S. are expected to rise to $165 million this year. “This is just the beginning of a mutually beneficial relationship between Kentucky and Cuba,” said Kentucky Commissioner of Agriculture Billy Ray Smith, who was one of seven state agriculture commissioners to attend the exhibit. “The Cuban people need food products of all kinds. Kentucky producers and agribusinesses are looking for new markets for their products. We are thrilled that the Kentucky Department of Agriculture was able to play a role in making this trade agreement a reality.” Producers or companies that are interested in participating in the Kentucky-Cuba trade agreement can reach the KDA’s Division of International Marketing at (502) 564-4696. FLORENCE The City of Florence has inked a 30-year lease agreement with Northern Kentucky Professional Baseball Ltd. to build a $5 million stadium that will serve as the new home for a Frontier League baseball team, an independent baseball league that consists of 12 teams competing in Ohio, Pennsylvania, Michigan, Indiana, Illinois and Missouri. It is not affiliated with Major League Baseball. Florence businessman Tom Gill has been awarded naming rights for the stadium, which will be situated on 28 acres located at the interchange of I-75 and U.S. 42. Tom Gill Chevrolet Field will feature 4,000 seats in addition to lawn seating for 2,500, concession areas, corporate suites, conference facilities, a party room and several party decks. LOUISVILLE
The decision to close the operation, which is being blamed on a decline in the neoprene business, will result in the loss of 285 of the city’s highest-paying industrial jobs. (The typical salary is in the $60,000 range.) However, the shut-down is not scheduled for another three years and until that time, Dupont has said it wants to keep its workforce intact. Dupont plans to move the Louisville operations to a newer plant just north of New Orleans, where the raw materials for neoprene are produced, eliminating shipping costs for the company. The move also eliminates union issues: The Louisiana facility is non-union, while the Louisville factory has been unionized for more than 40 years. Carl Goodman, president of the Local 5-2002 of the Paper, Allied-Industrial, Chemical and Energy Workers International Union, told the Louisville Courier-Journal that the announcement was completely unexpected. “We knew there was a study being done,” said Goodman, “but we’ve always been told we’re the most versatile neoprene plant in the country.” LEXINGTON Tennessee businessman C.M. Gatton, for whom the University of Kentucky’s College of Business and Economics is named, has donated property in downtown Lexington to UK to erect a new professional development center for business executives. The 2.7-acre parcel, once the site of the L.R. Cooke Chevrolet dealership, lies between the university campus and downtown Lexington and is valued at more than $2 million. The property was given to UK for the express purpose of developing a business center. UK’s plans for the project feature a two-story, 30,000-square-foot facility that will include a parking garage and possibly retail shops. The university would like to see a variety of offices housed there, including a new masters of business administration program. The cost of the project is estimated to be approximately $8 million. The new center helps bring to fruition talks between the university and the city of Lexington that have focused on revitalizing and redeveloping the area to the benefit of both the university and the community. JOHNSON COUNTY
Plans put forth by developer Carey DePalma include a hotel, hunter’s lodge, cabins, campground, meeting rooms, a skeet shooting range, general store, restaurant, beach, health club, miniature golf, and go-cart track. State representatives have already helped DePalma secure federal funding for road construction and improvements. Once site plans are further developed, the developer hopes to assemble a group of investors to fund the project. Ann Latta, secretary of the Kentucky Tourism Development Cabinet, says the state is very much in favor of the project. “We need this type of major development,” said Latta. MAYSVILLE
The unit will produce 268 megawatts of power when it goes commercial in the spring of 2005. The power will be shipped to 16 member electric cooperatives that serve more than 456,000 Kentucky homes, farms, businesses and industries in 89 counties. The unit will operate with a clean-coal technology known as a Circulating Fluidized Bed (CFB) process, which is recognized for extremely low emissions. Coal, mixed with a small amount of limestone, will burn at nearly half the temperature of a traditional pulverized coal unit and will have 98 percent of the sulfur dioxide removed during the burning process. The technology also results in five times less nitrogen oxide. In addition, the unit will have the capability to burn several million tires a year as well as 150,000 tons of biomass such as sawdust and other wood products.
The new facility, which has been named the E.A. Gilbert Generating Unit, is the first coal-fired unit to be built by EKPC in 21 years. EKPC is the only electric utility with new coal-fired generation under construction in the United States. FLORENCE Shire Pharmaceuticals, a British company that has its U.S. headquarters in Florence, has acquired Atlantic Pharmaceutical Services Inc. for approximately $17 million. APS, which is headquartered in Maryland, employs approximately 100 workers. APS’ Maryland plant presently manufactures a component of Carbatrol, Shire’s epilepsy drug, and will now also produce Shire products such as Adderall XR, its new attention deficit hyperactivity disorder medication, and Pentasa, an inflammatory suppressant. Shire is also planning to expand its Adderall XR line to be marketed to adults (it’s currently being used with children) and is working on new treatments for leukemia, HIV and bipolar disorder as well as vaccines for pneumonia and meningitis. STATE
The state’s General Assembly passed legislation to fund the KEES merit-based program in 1998, using net lottery proceeds. Since that time, $67.7 million in scholarship awards have been made to more than 94,000 college-bound high school students. Under the KEES program, high school students earn awards for each school year in which their grade point average is 2.5 or higher. Students can also earn a bonus award if they score 15 or higher on the ACT. The total of their annual awards plus their bonus award may be applied each year to college expenses at an eligible Kentucky post-secondary institution. The maximum annual award for which this year’s high school seniors may qualify is $2,500, which equates to a total benefit of $10,000. HENDERSON Whirlpool Corp. has announced plans to move the production of its plastics injection molding line from the Whirlpool refrigerator plant in Evansville, Indiana to Atlantis Plastics Inc. of Henderson. Atlantis has long produced a number of plastics components for Whirlpool, such as ice cube trays and butter compartment doors. Under the new arrangement, Atlantis will take over production of larger sections such as plastic crisper pans, freezer floors and air towers. As a result, Whirlpool products will account for nearly 90 percent of the Henderson plant’s activity. The additional product lines are expected to double sales for Atlantis. Atlantis officials say the company will need to construct a 25,000-square-foot addition in order to accommodate the increased workload and expect to hire approximately 40 more workers. Whirlpool officials have said the company is saving some $1 million by buying plastic parts from Atlantis rather than keeping the operation in-house. BOWLING GREEN
The plant is currently testing the line and assembly process for the prototype vehicle. The Cadillac XLR will share the same frame rails as the company’s popular Corvette model, which is produced at the Bowling Green facility. GM is planning for the plant to reach full production on the Cadillac by April. Company officials point to the Bowling Green plant’s success with GM’s new lean-manufacturing methods (based on the Toyota method) as the reason the facility was awarded the new line. While the company’s new Global Manufacturing System has been implemented worldwide, the Bowling Green plant has reaped the most success, with its quality figures jumping 49 percent since 1998. The plant recently won top honors in its class and was second overall in the J.D. Power Initial Quality Survey.
Business Briefs BOWLING GREEN
BRACKEN COUNTY
CAMPBELLSVILLE
CRESTWOOD
COVINGTON
EASTERN KENTUCKY
ERLANGER
GEORGETOWN
HIGHLAND HEIGHTS
LA GRANGE
LEXINGTON
LOUISVILLE
MOREHEAD
MORGANFIELD
MURRAY
NEWPORT
NORTHERN KENTUCKY
OLDHAM COUNTY
OWENSBORO
PERRYVILLE
PIKEVILLE
PRESTONSBURG
PRINCETON
RACELAND
RADCLIFF
RICHMOND
SHELBYVILLE
STATE
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Copyright 1996-2002, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2002, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
Though
Kentucky remains among the lowest in the nation in terms of the education
of its citizens age 25 and older, there is hope on the horizon: A recent
analysis of census data by the Kentucky State Data Center indicates
that the Commonwealth produced the largest gains of any state in the
nation between 1990 and 2000, with the percent of residents age 25-34
holding a high school degree rising from 79 percent to 84 percent. In
fact, Kentucky now leads 15 other states – including New York and
California – in the number of 25- to 34-year-olds with high school
degrees. 
Perot
Systems, an information technology services company headquartered in
Texas, has obtained a lease on a 24,000-square-foot facility in the
new Western Kentucky Center for Research and Development. The company
plans to use the facility as a hub for its business office consulting
and receivables management practices for the healthcare industry. 
The
Governor’s Office for the New Economy has released what one official
calls some “disturbing” news regarding Kentucky businesses’
utilization of computer technology. 
Citizens
of Cuba will soon be eating Kentucky-raised buffalo and drinking Kentucky-made
soft drinks as a result of a new trade agreement.
Dupont
Company has announced plans to end its joint operation with Dow Chemical
Co. in Louisville’s Rubbertown industrial complex, where it produces
neoprene synthetic rubber for autos, adhesives and other uses. 
A
private developer is working on plans to build a new resort at Paintsville
Lake.
East
Kentucky Power Cooperative has begun construction on a new $400 million
coal-generating unit in Maysville that is touted as the cleanest facility
of its kind in the nation. 
Construction
of the new unit will require as many as 600 workers and is expected
to pump $20 million in annual construction payroll into the economy
of Mason County and the surrounding region. When complete, county officials
estimate the unit will provide more than $55 million in property taxes.
The
latest statistics released by the state show that some $37 million dollars
in Kentucky Educational Excellence Scholarships (KEES) awards was earned
by 114,182 Kentucky students during the 2001/2002 school year.
Employees
at General Motor’s Bowling Green plant have begun test production
of the company’s new Cadillac XLR, a two-seater sports car slated
to go on the market next year with a price tag beginning at $70,000.